BOEM approves Equinor’s stake acquisition in Caesar Tonga field

Kavya Chivukula 20 August 2019 (Last Updated July 31st, 2020 13:23)

The Bureau Of Ocean Energy Management (BOEM) has granted its approval to Equinor Gulf of Mexico for its acquisition of an additional 22.45% stake in Caesar Tonga oil field from Shell Offshore, a subsidiary of Royal Dutch Shell, for $965m in cash.

BOEM approves Equinor’s stake acquisition in Caesar Tonga field
Equinor completes the acquisition of 22.45% of the Caesar Tonga oil field from Shell Offshore Credit:Kristina Kasputienė/ Pixabay.

The Bureau Of Ocean Energy Management (BOEM) has granted its approval to Equinor Gulf of Mexico for its acquisition of an additional 22.45% stake in Caesar Tonga oil field from Shell Offshore, a subsidiary of Royal Dutch Shell, for $965m in cash.

The deal was announced in May 2019. With this transaction, Equinor now holds 46% stake in the Caesar Tonga field.

Anadarko Petroleum is the operator of the field with a 33.75% interest, while Chevron holds 20.25% interest.

Equinor aims to strengthen its hold in the US Gulf of Mexico and currently produces around 130,000boe per day.

The company tweeted: “We’re upping our presence in the US, one of our core areas. Today we’ve increased our Caesar Tonga oil field interest in deepwater US Gulf of Mexico from 23% to 46% in a $965 million transaction with Shell Offshore Inc.

Equinor’s share price rose by 0.13% to NOK148.90 a share on the Oslo stock exchange after the deal. The company’s stock had been steadily falling since April 2019, when it reached a peak of over NOK203 a share.

This transaction is part of Shell Offshore’s focus on the strategic positioning of the deepwater business for growth. The sale is also part of Shell Offshore’s strategy to pursue projects that deliver value in the 2020s and beyond and contributes to the ongoing divestment programme.

The Caesar Tonga asset has eight producing wells, which yielded average daily production of around 71,000 barrels of oil equivalent (boe) for the total gross asset and nearly 16,000 boe for the buyer’s stake this year. The field has expected reserves of 68.5 million barrels of oil and 55 billion cubic feet of natural gas (buyer’s stake), equal to 78 million barrels of oil equivalent.

Shell has a deep-water portfolio of development and exploration acreage in the US Gulf of Mexico, Brazil, Nigeria and Malaysia, and in emerging offshore basins such as Mexico, Mauritania and the Western Black Sea.

Currently, Shell is the largest leaseholder and a major offshore producer of oil and natural gas in the US Gulf of Mexico.